What are the laws on capital gains, for 15% bracket. IE: 30k normal income with, 150k short term cap gain....would all of it be taxed at 15%? /or 150k long term cap gain.....would all of it be taxed at 10%? Can the addition of capital gains effect your normal tax rate and move you to the next higer rate.Short term capital gains are taxed as ordinary income so it will increase your tax bracket (up 3 if you are S, up 2 if you are MFJ. As the gains "fills" up a bracket, then the overage is taxed at the next bracket.Long term capital gains is taxed at a maximum of 20%. If you "fill" up the 15% bracket which taxes long term capital gains at 10%, then the overage is taxed at the 20% maximum. See a schedule D and fill it in with various scenarios to see the effect.
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